PayPal fees in Self-Assessment?

icicat

Hey all, sorry I keep bringing up threads Part of my income is through Paypal. When it comes to figuring what I actually earn in gross should I include the fees of the total payments? Also when declaring actual profit do I still need to declare the fees? If so are these fees included as 'losses'? Thanks

Jeremy535897

Turnover is before fees. When you calculate your profit, one of the expenses you deduct is the fees.

icicat

Thanks again Jeremy. Quick question with expenses if you're still there, so the paypal fees would go under 'Expenses' where it calculates your net profit, correct? Though would a laptop and keyboard and mouse be expensed under Annual Investment Allowance? I'm still really confused about separating off types of expenses.

Jeremy535897

If you treat the laptop etc as a fixed asset, you can claim AIA, and not treat it as an expense (this would be double counting). If the outlay is a modest couple of hundred pounds, say, you could just treat it as part of your expenses instead.

icicat

Cheers Jeremy. For my expenses I am just claiming £400 of paypal fees. I then have a laptop £1800 and mouse and keyboard and 3d printer parts that total up to £300. Am I right in thinking all equipment based expenses need to be in the Annual Investment Allowance? I'm not sure if it is a requirement to put them there or if it is more of an advantage somehow?

Jeremy535897

It's a question of fact. You can only claim revenue items as expenses, for example motor expenses, insurance etc, as well as costs of goods sold. Computers are fixed assets, not expenses (although trivial items are often treated as expenses for practical purposes).  Because they are "plant and machinery", you claim capital allowances on them. The AIA normally allows you to write the entire cost off against profits in the year you buy the plant, but if it suits you not to (for example because your profits and other income are too small to pay any tax even without claiming for them), you can carry them forward (but can then only claim a writing down allowance). There's lots of good advice here:
https://www.litrg.org.uk/tax-guides/self-employment

icicat

Great, thanks for explaining that Jeremy, will take a look at the link